CANADA STOCKS-Valeant surges, but energy, banks keep TSX down
* TSX closes down 7.56 points, or 0.06 percent, at 11,941.70 * Banks and oil companies push index lower * Crude, Europe add to unease * Valeant surges 15 pct after announcing acquisition By Alastair Sharp TORONTO, Sept 4 (Reuters) - Canada's main stock index closed slightly lower on Tuesday, weighed down by heavyweight energy and bank stocks that offset surging Valeant Pharmaceuticals International Inc, which said it would buy a rival. Energy companies were hit especially hard, as the price of oil slipped and investors questioned when crude would settle on a longer-term direction. "There's too many moving parts to get a fix on where energy prices go from here," said Elvis Picardo, strategist and vice-president of research at Global Securities in Vancouver. Canadian Natural Resources Ltd was the single biggest weight on the index, down 2.57 percent at C$29.22. Pipeline company Enbridge Inc slipped 1.55 percent to C$38.21, the second biggest weight. Banks also pushed lower, with Royal Bank of Canada down 0.56 percent at C$54.86. The banks gained last week on surprising robust profit and dividend increases. The Toronto Stock Exchange's S&P/TSX composite index closed down 7.56 points, or 0.06 percent, at 11,941.70. The commodity-related stocks retreated even as investors expect details on European bond-buying plans that would likely support demand for resources. "You would think that commodity stocks and the cyclical stocks would try to rally strongly on the back of that and you're not seeing that kind of participation from these sectors," said Sid Mokhtari, director of institutional equity research at CIBC World Markets. That is partly because miners and oil companies have already enjoyed a recent rally, he said. "People bought ahead of the news - the buy the rumor, sell the news assumption," he said. The energy sector gained 7.3 percent in the past three months, the best performance of any of the top 10 groups on the index. Shares of Valeant, the largest publicly traded drug maker in Canada, jumped almost 15 percent to close at C$57.94 after it announced a $2.6 billion deal to take over U.S. dermatology competitor Medicis Pharmaceutical Corp. Valeant has been on an acquisition spree since its 2010 takeover by Biovail Corp, preferring growth through acquisitions to heavily spending on research. "Valeant has a history of making fairly prudent acquisitions and especially ones that are accretive right off the bat. This one seems to be along those lines as well, so that would account for the big surge in the stock today," Picardo said. But it was a single bright spot in a rather dreary day for Canadian equities. Canadian National Railway Co slipped 0.52 percent to C$89.73 after it announced it would expand its fleet of freight cars and containers, but did not say how much it would cost. Research In Motion Ltd dipped 0.46 percent to C$6.54. New data showed the percentage of its shares being borrowed in the expectation of a future fall neared record highs, while an analyst warned that BlackBerry sales have likely been light in recent months. Most major European stock indexes fell more than 1 percent on Tuesday after rising on Monday when North American markets were closed for the Labour Day holiday. Adding to worries, manufacturing data out of the United States showed a third straight month of contraction in August.
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